Secretary of Transportation Aubrey Layne, pictured during his first three months of leadership, said the legislation Virginia passed in 2013 that overhauled how the state raises money for transportation paved the way for the state to cover road maintenance and look toward adding new capacity to the state's road system, but some revenue streams are lagging behind projections.

Secretary of Transportation Aubrey Layne, pictured during his first three months of leadership, said the legislation Virginia passed in 2013 that overhauled how the state raises money for transportation paved the way for the state to cover road maintenance and look toward adding new capacity to the state's road system, but some revenue streams are lagging behind projections. (Kaitlin McKeown / Daily Press)

While federal funding for highway construction and maintenance falls around the nation and many states scramble to find ways to fill the gaps, Virginia is a year and a half into a new way of funding its transportation infrastructure.

Virginia passed a landmark transportation funding bill in 2013 that overhauled how the state raises money for transportation. Secretary of Transportation Aubrey Layne said the legislation paved the way for the state to cover road maintenance and look toward adding new capacity to the state's road system, but some revenue streams are lagging behind projections.

Federal contributions to Virginia's highway fund hit more than $1.1 billion in 2010 and has stayed around $1 billion since then. In 2013, Virginia got $990 million — the least it received since 2006. Projections from Virginia Department of Transportation financial reports show the state expects even less in the coming years.

Then-Gov. Bob McDonnell pushed the new funding plan in 2013, winning a bipartisan victory on a longstanding political speed bump. The deal was meant to shore up Virginia's crumbling infrastructure with a new tax structure.

VDOT projected the legislation would mean additional billions for road improvements and transit over the next few years, primarily by retooling a state gas tax that hadn't been touched since 1987.

The old 17.5 cent-per-gallon tax on gasoline hadn't kept pace with inflation or the rising cost of gas over the previous 25 years and was replaced with a percentage-based wholesale tax on motor fuels.

The compromise also boosted sales taxes statewide and devoted more of the state budget to transportation over other services.

Layne served on the Commonwealth Transportation Board, which allocates highway funding for the state, between 2009 and 2014. He said the state saw the writing on the wall with declining federal dollars and had to reduce the number of projects it was trying to deliver.

The new funding mechanisms were desperately needed, he said, but revenue from the plan was never meant to replace federal funding.

Layne said the state has taken a hit on the gas tax since changing it to a percentage-based formula. The decline in gas prices in the last two months is the most dramatic example of the drop in fuel prices since the new system was put into place.

"The law anticipated putting about $4 billion in the first six years into transportation, with it growing as the activity went up" and more gas was sold in Virginia, Layne said.

The state will likely earn closer to $3 billion. "We've lost about 25 percent because the price of gas was much higher then," Layne said.

The lagging gas taxes haven't delayed the projects on VDOT's agenda, he said. Because most of the revenue was projected to come in further down the line, the state has still been able to move ahead with the planning and design of several new projects.

Since the new taxes were put in place in July 2013, the Hampton Roads Transportation Fund has collected more than $230 million from drivers and shoppers in Hampton Roads, but it hasn't grown as fast as expected.

The fund took in $145.35 million during fiscal year 2014 — $31 million less than VDOT had projected in 2013. According to the latest reports on the fund, the region generated $85.6 million in revenue in the first half of fiscal year 2015. The fiscal year ends June 30.

Gas tax revenue is lagging worse for Hampton Roads than for the state overall. The state has the benefit of a tax rate floor built into the legislation — meaning if gas drops below $3.11, the statewide rate stays the same no matter how far the actual price of fuel drops.

Layne said the regional entities didn't have a floor, but they may come back to the legislature to address that.

Gas taxes brought in $37 million for the Hampton Roads Transportation Fund in fiscal year 2014. VDOT had projected $62 million.

Gas-tax revenue remained sluggish through the first half of fiscal 2015, bringing in $23 million — the projection for the year was $71.4 million. The drop in gas prices in January and February likely hurt the second half of the year.

Two regional organizations develop, prioritize and direct the funding for regional infrastructure projects: the Hampton Roads Transportation Planning Organization and the Hampton Roads Transportation Accountability Commission, which was created last year by the General Assembly specifically to manage the money in the Hampton Roads Transportation Fund.

Though there's less revenue than projected, HRTAC interim executive director Camelia Ravanbakht said the fact that there's any money coming in at all means the region can do more than ever before.

"Of course, if less money comes in we need to look at other options available. But the bigger picture here is we have the funds, we have the mechanism and we have the authority through HRTAC to look at all the financing options," she said.

HRTAC is authorized not only to spend the money collected regionally, but also to leverage that money to borrow to finance road construction, she said.

In January HRTAC allocated nearly $100 million to kick-start three Southside projects. Around $70 million was put behind the design and right-of-way acquisition for the I-64/I-264 interchange in Virginia Beach. The commission allotted $20 million for planning and engineering on the High Rise Bridge replacement on I-64 in Chesapeake and a supplemental environmental study for possible third-crossing options over the James River.

The HRTPO approved $44 million early last year to help pay to widen a 5.6-mile stretch of I-64 in Newport News from four lanes to six between Jefferson Avenue and Yorktown Road. The Commonwealth Transportation Board approved an $84.8 million contract on Wednesday for Northern Virginia-based Shirley Contracting to design and build the project.